by BBC News Online's Katherine Sellgren at the SHA conference in Newport

Head teachers have called for a more transparent system for the distribution of funding to schools, saying their budgets for next year amount to a cut in real terms.

While the problem of recruiting teachers was described at the Secondary Heads Association's (SHA) conference as the "Everest of peaks", heads were also concerned about how they would balance their books in the coming financial year.

Many said their new budget was less than last year's when measured against inflation and the pay rise for teachers.

But, when asked to explain the real terms cut, heads' concerns were dismissed by the Education Secretary, David Blunkett, as not true and not correct.

Mr Blunkett said standard spending assessments (SSAs) had risen above inflation and, for the first time, heads had direct grants over which they had control.

A head's story

Tony Neal, head of De Aston School in Market Rasen, Lincolnshire, would not dispute the fact that the government has poured money into education.

It will mean larger classes in the end, because - like many other schools - the only way we can find budget cuts is through staffing adjustments

Tony Neal

But he remained concerned about how that funding was being allocated and shared among schools.

Mr Neil said his local education authority had actually given more money to schools than the government had stipulated, yet he still faced a budget deficit.

"Despite that increased funding, what's been allocated to most secondaries in Lincolnshire doesn't meet the amount required to match inflation for next year.

The shortfall in his budget for the coming year would have a major impact on the 1,300 pupils at his school.

"It will mean larger classes in the end, because - like many other schools - the only way we can find budget cuts is through staffing adjustments," Mr Neal said.

Standards funding

The De Aston School would also be facing a reduction in standards funding - this inspite of a 30% increase from the government for next year, he added.

"Because of the way it's distributed, it's very heavily targeted towards particular government initiatives.

"So a large number of schools - including mine - are finding they have less standards funding than last year," he said.

There was nothing wrong with the government targeting funds, he said, rather the criteria a school must match to get that cash.

"If the cost of that is that some schools are ending up with less, there's something fundamentally wrong with the way it's being distributed," he argued.

Many disadvantaged children were missing out, simply because they lived in the wrong area.

Sixth form funding

There was also the issue of funding the changes in sixth form curriculums, with the introduction of the new AS- and A2-levels.

"The government claims it has put money in to meet the cost of these changes - £35m last year.

"But a large number of LEAs are saying we can only have that money as part of the mainstream funding to meet the government's 2.5% increase to all schools."

Welsh lose out

The issue of funding for schools in Wales - home to this year's SHA conference - was also raised as a concern by many heads.

General secretary of SHA, John Dunford, promised to campaign hard for a funding reform in Wales, where many heads felt funds meant for them were not getting through.

The children of Wales are being cheated of their right to a well funded education

John Dunford, SHA

The Welsh Assembly Cabinet had decided that funds should not be hypothecated, so that it was impossible to tell if money from Westminster - earmarked for education - was actually going into schools, Mr Dunford said.

"The children of Wales are being cheated of their right to a well funded education by a cabinet which insists on giving maximum flexibility to local authorities and minimum power to head teachers" he said.

In Wales, there were no excellence-in-cities areas, no education action zones, no specialist colleges and no truancy initiative money, he added.